a juvenile court decision submitted for
publication, the names of all juveniles shall be replaced with initials in the
caption and body of the published decision. In any press release or other
public presentation of information from a juvenile court, the names of any
juvenile shall be replaced with initials.

Getting back to the opinion, the Court of Special Appeals
begins by explaining that

[a]t the disposition hearing and in
this appeal, appellant has conceded that the victim is entitled to restitution
for her stolen iPhone 4. The sole appellate issue is whether the juvenile court
`used the wrong standard in determining the amount of restitution owed,’ when
it ruled that the victim `was entitled to the original purchase price of the
iPhone 4 so that she could be made “whole.”’ We conclude that the juvenile
court erred by basing the amount of restitution on the original purchase price
of the phone, rather than the replacement cost for the phone, which would have
reflected depreciating market factors, including the availability of newer
models such as the iPhone 5. Accordingly, we shall vacate the restitution order
and remand for a new restitution proceeding.

In re Raymond C., supra.

The court then goes on to outline the facts that led to this
proceeding:

Pursuant to an agreed statement of
facts, appellant entered a plea of involved to the May 2014 theft of an iPhone
4. At a July 22, 2014 hearing, the State sought restitution for the victim,
Schina McKinnon Shields. Shields testified that on February 14, 2013, she
purchased two new iPhone 4 cell phones for her daughters, paying a total of
$540, or $270 for each. She produced store receipts showing a deposit of $94,
plus a paid balance of $445.97. According to Shields, the phone stolen by
appellant was working and in good condition. Moreover, the price paid for the
phone did not include a phone contract, because the family already had
purchased a plan.

Citing this evidence, the State
requested restitution in the amount of $270, representing the purchase price
for the stolen phone. Defense counsel argued that the court was required to
take into account the depreciated market value of the phone.

In re Raymond C., supra.

The Court of Special Appeals went on to explain that “[t]he
following colloquy ensued:”

[DEFENSE COUNSEL]: If the Court were to
take the witness at perhaps her misunderstood word that each phone was $270, in
the world of cell phones, a depreciation of a year is going to be substantial.

When it comes to the replacement, as
she testified of an iPhone 4 in the spring of this year, there are additional
models of an iPhone 5 where newer technology exists and so I would ask the
Court to take into account the fact that depreciation is going to occur rather
rapidly in that kind of case. And so, if the Court is inclined to grant
restitution based on that, then it should consider that the phones are going to
be worth substantially less than $275. We would ask in the neighborhood of $100—

THE COURT: Let me ask you, if you
bought a new one, it would be substantially more?

[DEFENSE COUNSEL]: If you were to buy a brand
new iPhone, the latest iPhone 5, it would be substantially more.

THE COURT: Today?

[DEFENSE COUNSEL]: Today.

THE COURT: Replacement cost.

[DEFENSE COUNSEL]: Your Honor, the
replacement cost would be the replacement for the item that was taken, not the
latest and greatest.

THE COURT: Replacement cost.

[DEFENSE COUNSEL]: It would be for—it
would be for the phone that was taken.

THE COURT: And that was a new phone
that was purchased. Why must she now go buy a used phone?

[DEFENSE COUNSEL]: Because your Honor
what was taken was a used phone. A new phone was not taken.

THE COURT: But they have to buy a phone
now.

[DEFENSE COUNSEL]: And on the
used market, I am not sure what the market rate for a used iPhone 4 is but the
respondent, the witness is not entitled to replacement of a brand new phone.

THE COURT: Yes, she is. She is
entitled to be made whole.

[DEFENSE COUNSEL]: To be made
whole. Absolutely.

THE COURT: With an item.

[DEFENSE COUNSEL]: And in that
case, that was an iPhone 4.

THE COURT: She didn't purchase a used
phone.

[DEFENSE COUNSEL]: She did not purchase
a used phone.

THE COURT: Okay.

[DEFENSE COUNSEL]: She purchased a
brand new phone a year before—

THE COURT: Replacement cost.

[DEFENSE COUNSEL]:—this incident
occurred.

THE COURT: Replacement cost.

[DEFENSE COUNSEL]: And so what was
taken was a used phone.

(Emphasis added).

In re Raymond C., supra.

The opinion then explains that the juvenile court

concluded that Shields should receive
the original purchase price of the stolen phone, as follows:

The Court has had an opportunity to
review these two exhibits here, Madam Clerk, 1 and 2 which have been marked for
identification and admitted. I don't believe Ms. Shields was confused. Her
testimony was clear to me. And on the record the she paid $94 for a deposit,
$446.02 [sic] for the phone[s] after she purchased them and it is the Court's
understanding that ... each phone was $270.

Madam Clerk, the Court will in fact
order restitution in the amount of $270.

In re Raymond C., supra.

The opinion then goes on to outline the “standards governing
review of juvenile restitution orders”:

Juvenile courts may order restitution
to `compensate victims who have been injured or who have suffered property loss
as a result of the wrongful acts of a minor, although “a court's concern that
the victim be fully compensated should not overshadow its primary duty to
promote the rehabilitation of the defendant.”’ In re Earl F., 208 Md. App. 269, 276 (Maryland Court of Appeals 2012) (quoting
In re Don Mc., 344 Md. 194, 203
(1996). Restitution promotes rehabilitation of the juvenile by impressing upon
him `the gravity of harm he has inflicted upon another, and provides an
opportunity for him to make amends.’ In
re Herbert B., 303 Md. 419, 417 (Maryland Court of Appeals 1985); see In re Earl F., 208 Md. App. at 276.

(a) Conditions for judgment of
restitution — A court may enter a judgment of restitution that orders a defendant
or child respondent to make restitution in addition to any other penalty for
the commission of a crime or delinquent act, if:

(1) as a direct result of the crime or
delinquent act, property of the victim was stolen, damaged, destroyed,
converted, or unlawfully obtained, or its value substantially decreased;

* * *

(b) Right of victims to
restitution.—A victim is presumed to have a right to restitution under
subsection (a) of this section if:

(1) the victim or the State requests
restitution; and

the court is presented with competent
evidence of any item listed in subsection (a) of this section.

This Court reviews a juvenile court's
restitution order de novo for legal
error as to the standards applied, for clear error as to any first-level
findings of fact, and for abuse of discretion as to the ultimate decision to
require a payment and the amount of that payment. See In re Earl F.,208 Md. App. at 275 & n. 2
(Maryland Court of Special Appeals; In re Delric H., 150 Md. App. 234,
240 (Maryland Court of Appeals 2003);
see also Silver v. State, 420 Md. 415, 427 (Court of Appeals of Maryland
2011); McCrimmon v. State, 225 Md. App. 301, 306 (Maryland Court
of Appeals 2015).

In re Raymond C., supra.

The court began its analysis of the issues in the case by
explaining that

Appellant argues that the juvenile
court committed legal error in ordering restitution to `make the victim whole,’
rather than to rehabilitate him, and by improperly awarding the amount of the
original purchase price, rather than the depreciated replacement value of the
device, which was no longer new and had been technologically superceded by the
iPhone 5.

We agree with the State that the
juvenile court did not err or abuse its broad discretion by expressing the
purpose of a restitution order under Crim. Proc. § 11-603(a) as making the
victim `whole; by ordering restitution in the amount of the “replacement value”
of her stolen phone. As this Court has recognized, in In re Earl F., 208 Md. App. at 276, the statutory restitution
scheme expressly authorizes compensation of `victims who have . . . suffered
property loss as a result of the wrongful acts of a minor’ because such
payments can promote rehabilitation by demonstrating to the juvenile the actual
consequences of his behavior and by requiring him to take corrective action.

At the heart of this appeal, then, is
appellant's complaint that the juvenile court abused its discretion in ordering
restitution based on the original purchase price of the stolen phone.
Throughout the hearing, the court insisted that restitution should be premised
on replacement cost, which is what it would take to make Shields `whole.’ Such
a replacement cost necessarily would have reflected any depreciation in the
market value of the iPhone 4 as a result of the introduction of more advanced
technology and devices, including the iPhone 5. Yet the State presented no
evidence of the replacement cost for the iPhone 4. Instead, it offered only the
original purchase price of $270 that Shields paid for the phone fifteen months
before it was stolen. In the absence of any other evidence of value, the court
ordered restitution in that amount.

Appellant argues that the juvenile
court's ruling was either an erroneous application of an incorrect legal
standard or an abuse of discretion in setting the amount of the restitution.
Appellant relies primarily on two Maryland decisions recognizing that the value
of stolen computers should take into account the depreciating effect of more
advanced models hitting the market.

In re Raymond C., supra.

The court then went on to explain that in

In
re Christopher R., 348 Md. 408, 444 (1998), the Court of Appeals considered
the appropriate amount of restitution for a stolen computer and related
equipment that was less than three years old. The juvenile court, stating that
it had `absolutely no way to know what rate of depreciation should be used for
computers,’ ordered restitution based on the original purchase price. Id. at 410. Applying the
predecessor to Crim. Proc. § 11-603, which expressly capped the amount at `the
lesser of the fair market value of the property or $5,000,’ the Court of
Appeals held that the it was error to base `restitution on the purchase price
of the stolen property rather than its fair market value at the time of the
theft.’ Id. at 412-413. The
Court reasoned that advances in the field of computer technology `are
constantly being made so that used equipment depreciates in value over relatively
short periods of time.’ Id.

In Champagne
v. State, 199 Md. App. 671, 676-678 (2011), this Court relied on Christopher
R.'s reasoning in concluding that the State failed to prove the value
element in the crime of property theft over $500. Id. at 673. In reviewing the evidentiary record, we recognized that
the burden was on the State to establish beyond a reasonable doubt the value of
a stolen three-year-old laptop, in accordance with Md. Code § 7-103(a) of the
Criminal Law Article, which defines `value’ to mean `the market value of the
property . . . at the time and place of the crime’ or `if the market value
cannot satisfactorily be ascertained, the cost of the replacement of the
property . . . within a reasonable time after the crime.’ Id. at 675. We also recognized that `t]he present market
value of stolen property may be proven by direct or circumstantial evidence and
any reasonable inferences drawn therefrom.’ Id. at 676. Citing Christopher R.'s instruction
about depreciation of computer technology, as well as similar language from
out-of-state cases, we held that the purchase price of the laptop was ‘”‘circumstantially
relevant to the present market value’ of that property,'” but not sufficient by
itself to establish that the value of the computer at the time of the theft was
over $500. Id. at 676-678 (citation
omitted). As a result, we vacated that conviction and directed a guilty verdict
on the lesser included offense of theft of property worth less than $500. Id. at 678.

In re Raymond C., supra.

The Court of Appeals then explained that, in

[a]pplying the teachings of Christopher
R. and Champagne, we agree with appellant that the
juvenile court erred by rejecting defense counsel's argument `that the fifteen
month old iPhone was subject to the same accelerated rate of devaluation as any
other electrical device.’

The State attempts to distinguish Christopher
R. on a number of factual and legal grounds. First, the State argues
that in appellant's case, the juvenile court did not mistakenly believe that it
was required to base the amount of restitution on the original purchase price,
and the State did not take the position that replacement value was irrelevant.
Neither of these proffered differences is material to whether the juvenile
court erred in ordering restitution based on the original purchase price of the
phone.

Alternatively, the State points out
that unlike the predecessor statute applied in Christopher R., the
current version of Crim. Proc. § 11-603 does not expressly limit restitution
orders to `fair market value’ and requires only `competent evidence’ to support
the amount of the restitution. We are not persuaded that the holding or
rationale in Christopher R. would be different under the current
version of Crim. Proc. § 11-603. Although the statute no longer contains
the `fair market value’ language, `a victim's entitlement to a restitution
award and the amount of the award are facts that the State must establish by a
preponderance of the evidence.’ Juliano v. State, 166 Md. App. 531, 540
(2006).It is the State's burden to
`introduce “competent evidence” to carry its burdens of production and
persuasion that the victim is entitled to restitution, and if so, the amount of
it.’ Id. As recognized in Christopher R. and Champagne, when
restitution is ordered for stolen computers and comparable electronic devices
that are commonly subject to market depreciation, including `smart phones’ like
the iPhone models, the State cannot satisfy its burden of production merely by
presenting evidence of the original purchase price.

In re Raymond C., supra.

The Court of Appeals went on to explain that,

[h]ere, there was no dispute that
Shields is entitled to restitution for her stolen phone. When the State offered
evidence of the original purchase price, defense counsel challenged that
evidence, because it did not account for the depreciation in market value
during the fifteen months Shields used it before the theft, during which newer
technology and devices, became available. Neither side offered any
evidence of what a new or used iPhone 4 would cost. Despite the juvenile
court's insistence that the appropriate measure of restitution was the cost to
replace the stolen phone, there was no evidence of that replacement cost.

Under the analytical framework of Crim.
Proc. § 11-603, the question here is whether the original purchase price of
Shields's stolen phone, by itself, established the appropriate restitutionary
measure of her loss. See Juliano, 166
Md. App. at 540 (2006). Following the decision and rationale in Christopher
R., and the rationale in Champagne, we conclude that
the answer is no. It was the State's burden, inherent in its obligation to
prove the amount of restitution by a preponderance of the evidence, to present
admissible evidence showing the replacement cost for the iPhone 4 as of the
date of the theft.

In this case, that proof might have
been as simple as proffering the price of an iPhone 4 from an online retailer.
Indeed, cell phones are widely available and standardized tools of modern life,
for which replacement costs may be rather easily determined.2 Instead,
the State relied solely on the original purchase price, and the juvenile court
erred in basing its restitution order solely on that evidence. Therefore,
we will vacate the order of restitution and remand the case to the juvenile
court so that it may conduct a restitution hearing, at which the State must
establish, by competent evidence, the appropriate amount of restitution for the
stolen phone. See Juliano, 166
Md. App. at 544.

On January 19, 2011, Kane and his
co-defendant were indicted on
two counts of conspiracy to commit wire fraud and fraud in connection
with computers. . . . The
indictment also contains four forfeiture allegations involving `any property
which constitutes or is derived from proceeds traceable to’ the offenses charged
in the indictment, seeking `an in personam criminal forfeiture
money judgment up to $1,500,000.00.’ . . . The indictment alleges that, from
about April 2009 to September 2009, Defendants devised a way to exploit video
poker machines to defraud casinos, which involved changing the playing credits
to a higher denomination, accessing the
previous winning hand of cards that were wagered at the lowest denominations,
and triggering a jackpot without playing or paying at the higher denomination. .
. .

According to Kane, on July 3, 2009,
after he won a $10,000 jackpot at the Silverton Hotel and Casino (`Silverton’)
and before he could be paid, Gaming Control detained him for allegedly
committing the fraud asserted in count 2 of the indictment. . . .

At the time, he had $27,000 in his
pocket (`the Property’) and approximately $1,200 in credit on the machine he
was playing, which Gaming Control cashed out. . . . Gaming Control seized the
Property and cash `as evidence.’ . . . A criminal action was initiated in Las
Vegas Justice Court, where Kane made this initial appearance on September 1,
2009 (`State Case’). . . . The State Case was subsequently dismissed in January
2011, when the Government filed a complaint and the indictment was issued in
this case. . . . Kane contends that the
Property belongs to him and was not part of the proceeds of any alleged fraud. .
. .

U.S. v. Kane, supra.

The opinion then takes up the “procedural history” of the
case, explaining that

[i]n October 2012, in response to
Defendants' motions to dismiss, the Magistrate Judge recommended dismissal of
counts 2 and 3 of the indictment. . . . The Government initially objected but
subsequently moved to dismiss these two counts. . . . The Government later
moved to dismiss the remaining conspiracy count without prejudice. . . . Both motions were granted. . . . The Court
issued the final dismissal order on November 25, 2013. . . .

Over a year later, on June 10, 2015,
Kane filed a motion for return of property taken by Gaming Control and FBI
agents. . . . In its response, the Government indicated it would return
items seized by the FBI, excluding the money seized by Gaming Control. (Dkt.
no. 124 at 1.) At the hearing on the motion, the parties advised the Magistrate
Judge that the matter was resolved . . . accordingly, the Magistrate Judge
denied the motion without prejudice. . . .

[a] person aggrieved by an unlawful
search and seizure of property or by the deprivation of property may move for
the property's return. The motion must be filed in the district where the
property was seized. The court must receive evidence on any factual issue
necessary to decide the motion. If it grants the motion, the court must return
the property to the movant, but may impose reasonable conditions to protect
access to the property and its use in later proceedings.

Getting back to the District Court Judge’s opinion, it goes
on to explain that

Kane's counsel subsequently contacted
Gaming Control for the return of the Property. . . . In a letter dated July 31,
2015, Gaming Control informed Kane that he had `thirty (30) days to file a
written claim with the State Gaming Control Board (Board) for return of the
evidence seized in the above-referenced matter [the State Case].’ . . . The
letter also outlines the procedures for resolving any disputed claims to the
seized Property pursuant to Nevada Revised Statutes § 465.110. . . . Kane
responded to assert a claim to the Property, as did Silverton. . . . The
Government asserts no claim to or interest in the Property. . . .

On August 17, 2015, Kane filed a second
motion for return of property, seeking a return of the Property (`the Motion’).
. . . After a hearing on the Motion, the Magistrate Judge issued the [Report & Recommendation] to which Kane now objects.

U.S. v. Kane, supra.

As this site explains, a U.S. District
Court Judge, like the judge who has this case, can refer certain matters to a
U.S. Magistrate Judge, which means the Magistrate Judge will take steps to do
what he or she needs to do to draft a Report & Recommendation that will
recommend that the District Court Judge take certain action, such as granting
or denying a motion for return of property. The District Court Judge should review the
recommendation(s) the Magistrate Judge makes in the R&R and either accept
them, and the action predicated on them, or reject both.

Getting back to the opinion, the District Court Judge begins
her analysis of the issues raised by the Magistrate Judge’s recommendation by
explaining that the parties to this litigation

do not address the standard of review
of the Magistrate Judge's recommendation. The Magistrate Judge issued an
R&R because the ruling is equivalent to an order of dismissal for lack of jurisdiction, which is dispositive and may not be finally determined by a
magistrate judge. . . . This Court `may accept, reject, or modify, in whole or
in part, the findings or recommendations made by the magistrate judge.’ 28 U.S.Code § 636(b)(1). Where a party timely
objects to a magistrate judge's report and recommendation, then the court is
required to `make a de novodetermination of those portions of the
[report and recommendation] to which objection is made.’ 28 U.S. Code §
636(b)(1). In light of Kane's objection, the Court will engage in
a de novo review to determine whether to accept the Magistrate
Judge's R&R.

U.S. v. Kane, supra.

The District Court Judge went on to explain that the
Magistrate Judge recommends that

the Court decline to exercise
jurisdiction over Kane's Motion and deny the Motion without prejudice to Kane,
which would allow him to pursue recovery of the Property under state law. . . .
Kane contends that the Magistrate Judge is right on the law but wrong in its
application. . . . The gist of Kane's argument is that because the Property was
seized as `evidence’ in this case, and because the Government sought its
forfeiture in this action, the Property has a nexus to this case, not the State
Action. Kane also raises arguments that go to the merits of his Motion.
However, because the Court agrees with the Magistrate Judge's recommendation to
decline to exercise equitable jurisdiction, the Court does not address the
merits of the Motion.

U.S. v. Kane, supra.

She goes on to explain that Kane is seeking a return of

the Property pursuant to Rule 41(g) of the Federal Rules of Criminal Procedure. Rule 41(g) provides for `[a] person
aggrieved by an unlawful search and seizure of property or by the deprivation
of property [to] move for the property's return.’ Rule 41(g).While Rule 41(g) is generally used to
facilitate the return of seized property after an indictment has been filed, `district
courts have the power to entertain motions to return property seized by the
government when there are no criminal proceedings pending.’ Ramsden v. United States, 1 F.3d 322,
324 (U.S. Court of Appeals for the 9th Circuit 1993) (referencing Rule
41(e), as amended in 1989, which addressed motions for return of property).
Such motions, however, `are treated as civil equitable proceedings and,
therefore, a district court must exercise ‘caution and restraint’ before
assuming jurisdiction.’ Id. (quoting Kitty’s East v. United States, 905 F.2d
1367, 1370 (U.S. Court of Appeals for the 10th Circuit 1990)).

U.S. v. Kane, supra.

The opinion then explains that

[t]o ensure that the district courts
refrain `from exercising their equitable jurisdiction too liberally,’ the Ninth
Circuit, like other circuit courts, has adopted four factors for the district
court to consider in deciding the threshold question of jurisdiction. Ramsden v. United States, supra; see
United States v. Comprehensive Drug Testing, Inc., 513 F.3d 1085, 1103 (U.S. Court of Appeals for the 9th
Circuit 2008) (noting that the district court may exercise equitable
jurisdiction to entertain a Rule 41(g) motion only after analyzing the
four-factor test articulated in Ramsden). `These factors include:
1) whether the Government displayed a callous disregard for the constitutional
rights of the movant; 2) whether the movant has an individual interest in and
need for the property he wants returned; 3) whether the movant would be
irreparably injured by denying return of the property; and 4) whether the
movant has an adequate remedy at law for the redress of his grievance.’ Ramsden v. United States, supra. If the
`balance of equities tilts in favor of reaching the merits’ of a Rule 41(g) motion,
the district court should exercise its equitable jurisdiction to entertain the
motion. Ramsden v. United States, supra.

U.S. v. Kane, supra.

The District Court judge went on to explain that she

agree[d] with the Magistrate Judge that
a balance of these factors counsels against reaching the merits. The Court
accordingly declines to exercise equitable jurisdiction. The first
factor—whether the Government has demonstrated a callous disregard for Kane's
constitutional rights—is at best neutral. There is no dispute that the
Government did not seize the Property, did not take actual possession of the
Property after the initiation of this case, and does not claim an interest in
the Property. At the hearing before the Magistrate Judge, the Government
suggested that because the Property was not seized pursuant to a federal
warrant, the Court should allow the dispute to be resolved through the process
established under state law. . . . Kane insists that the Government's
contention, if accepted, would allow the Government to abdicate responsibility
any time the Government works with state or local agencies. . . .

The Court need not resolve these
hypothetical scenarios because evaluation of the first factor is necessarily
fact specific. The Property was seized as `evidence’ by Gaming Control in the
State Action, which was initiated and only dismissed after the complaint was
filed and the indictment returned in this case. The Property was not seized by
any agency of the federal government. And Kane did not seek a return of the
Property when the State Action was dismissed—he even failed to inquire as to
the status of the Property at the time. Kane further argues that the Government
in this case sought to forfeit the very Property that the Government claims it
did not possess. . . .

However, as the Government aptly points
out, the forfeiture allegations are for a general `criminal forfeiture money
judgment up to $1,500,000.00’ . . ., not for forfeiture of the Property in
particular. . . . This distinction makes
a difference in the Court's evaluation of the callousness of the Government's
action under the first factor.

U.S. v. Kane, supra.

The District Court Judge then went on to parse the remaining
factors courts consider in deciding whether to exercise equitable jurisdiction:

There is no dispute that Kane has an
interest in the return of the Property, which is a substantial sum of money.
The second factor thus favors the exercise of equitable jurisdiction.

However, the third and fourth factors
counsel against the exercise of equitable jurisdiction. Kane will not suffer
irreparable injury because he has an adequate remedy under state law. In fact,
Gaming Control has informed Kane of the process for resolving disputed claims
to seized evidence as established in Nevada Revised Statutes § 465.110(2)(b).
Section 465.110(2) provides, in pertinent part, that `evidence seized by an
agent of the [Gaming Control] Board which does not result in a complaint
charging a violation of the law and evidence for which an order of disposition
is not entered pursuant to subsection 1 [addressing disposal of evidence]’ must
be resolved pursuant to an established process. . . . First, Gaming
Control must notify potential claimants of their right to file—and their
deadline for filing—a claim, which it has done here. Nevada Revised
Statutes § 465.110(2)(a). Where more than one claimant asserts a claim, the
dispute must be resolved pursuant to the following process: (1) the claimants
may agree on how to divide the evidence, subject to Gaming Control's approval;
(2) the claimants may submit the dispute to binding arbitration; or (3) Gaming
Control may interplead the evidence. Nevada Revised Statutes §
465.110(2)(b)(1)-(3). This process has been initiated in this case, thus
giving Kane an adequate remedy to pursue a return of his claimed property.

Kane argues that the process
established in subsection 1, not subsection 2, of Nevada Revised Statutes
§ 465.110 applies. . . . Subsection 1 provides that `[a]fter the final
adjudication of . . . any other complaint involving the seizure of evidence by
an agent of the Board, the court may enter an appropriate order disposing of
all physical evidence pertaining to the complaint.’ Nevada Revised
Statutes § 465.110(2)(a). But the complaint in the State Action was not
adjudicated; it was dismissed when federal charges were filed. More important,
even assuming that dismissal of the State Action amounts to a `final
adjudication,’ Kane's remedy is to seek relief from the court in the State
Action pursuant to Nevada Revised Statutes § 465.110(1).

the Magistrate Judge's Report and
Recommendation . . . is adopted in full. Kane's objection to the R&R . . .
is overruled. The Court declines to exercise equitable jurisdiction to
entertain Kane's second motion for return of property. Kane's second motion for
return of property . . . is denied without prejudice.

U.S. v. Kane, supra.

As Wikipedia explains, when a motion is denied “without prejudice,” it means the party who filed that motion can try again, in another
motion.

Friday, July 22, 2016

This post examines a recent opinion from the Court of Appeals of Oregon:State v. Hirschman, 2016 WL 3675617 (2016). The court begins by explaining that

[a]cting as a self-described `Internet
troll,’ defendant posted an advertisement on Craigslist, stating that he would
give $20 to a person who would bring the person's official ballot to defendant,
let defendant complete it, then sign the person's own name and submit the
ballot to an elections volunteer. It is undisputed that defendant did not
intend to actually vote using another person's ballot. To the contrary, the state
acknowledged that defendant's motives were `political shenanigans * * * on the
Internet’ and `entertainment.’ Nonetheless, the state charged defendant with
knowingly violating Oregon Revised Statutes §260.715(9), which prohibits making
an `offer to purchase, for money or other valuable consideration, any official
ballot.’ The trial court convicted defendant after rejecting his arguments
that Oregon Revised Statutes §260.715(9) unconstitutionally abridges
expression and that his actions had not violated the statute.

State v. Hirschman,
supra.

The court went on to explain that

[o]n appeal, the parties dispute the
meaning of certain terms used in §260.715(9). They also disagree about
whether the statute, as properly construed, violates various constitutional
provisions, including Article I, section 8, of the Oregon Constitution. We conclude, as explained below, that
defendant's actions violated Oregon Revised Statutes §260.715(9). That is,
by making the Craigslist posting, defendant did `offer to purchase’ a ballot,
because his words communicated that he was proposing to acquire another
person's ballot in exchange for money. However, we also conclude that the statutory
prohibition on making an `offer to purchase’ a ballot is facially unconstitutional
because, by its terms, it criminalizes expression and is not wholly contained
within a well-established historical exception to the protections of Article I,
section 8. Accordingly, the trial court should have granted defendant's demurrer. Because it did not, we reverse and remand.

State v. Hirschman,
supra.

The Court of Appeals began its analysis of the issues in the
case by explaining that

[t]he facts are not in dispute. A few
days before the 2010 general election, defendant posted on the Craigslist political
forum website. The posting stated,

`Wanna make an easy $20 for voting?
(Downtown Bend)’

`Are you interested in making a quick
and easy $20? Meet us in the parking lot downtown near the drop off voting
booth this weekend. All you need to do is bring your UNFILLED clean voting
ballot and let us fill it out then you sign, and we hand it to the volunteer in
the voting booth. Its [sic] that simple! Then you get $20. We'll be
there all weekend through [T]uesday.’

(Boldface in original.) Craigslist deleted
the post within half an hour. Although the posting included a link allowing
people to reply to defendant's message, he did not get any responses during the
brief time the message was posted.

A Bend police officer investigated
defendant's posting. He went to the ballot drop off site but did not see any
suspicious activity. The Oregon Secretary of State's office then opened an
investigation and referred the matter to Oregon Department of Justice Special Agent Todd Gray. Gray traced the posting to defendant. During defendant's
subsequent interview with Gray and another agent, he was `compliant and
cooperative.’ Gray testified that defendant seemed `shocked that what he had
done had risen to the level to have two special agents from the Attorney
General's Office interviewing him.’

During the interview, defendant
acknowledged that he had created the Craigslist posting. Defendant maintained,
however, that he had not purchased or attempted to purchase official ballots.
Instead, he contended that he `was basically making a mockery of the system,
and more so than anything, playing around, goofing around on the Internet.’
Further, defendant stated, `There's a lot of vulgarity there, and then people's
political opinions, and I felt like I needed to chime in.’

State v. Hirschman,
supra (emphasis in the original).

The opinion goes on to explain that the

state charged defendant by district
attorney's information with knowingly offering to purchase official ballots in
violation of Oregon Revised Statutes §260.715(9). Defendant demurred to the
information before trial, contending that Oregon Revised Statutes
§260.715(9) facially violates the free speech protections of the state and
federal constitutions. In arguing that Oregon Revised Statutes §260.715(9)
violates Article I, section 8, of the Oregon Constitution, defendant asserted,
among other things, that the statute directly regulates speech and is not
wholly contained within a well-established historical exception to section 8's
protections.

The trial court denied defendant's
demurrer. Specifically, the court concluded, in part, `that Oregon Revised
Statutes §260.715(9) is directed at harmful effects. * * * The statute is not
directed at the content of speech; the statute prohibits conduct, specifically a
type of commerce rather than speech itself.’ Additionally, the court concluded
that the statute is not overbroad or unconstitutionally vague. In so deciding,
the court accepted the state's definition of `offer’ as being `a proposal to
enter into a bargain wherein a ballot is exchanged for consideration,’
regardless of whether the person making the offer subjectively intended to
complete the transaction.

During a discussion of proposed jury
instructions, the parties again debated the meaning of the word `offer.’ In
that context, the trial court rejected defendant's argument that a
communication qualifies as an `offer’ only if the offeror `actually intend[s]
to enter into the contract.’ To the contrary, the court reasoned that `offer’
means `a proposal communicated by either words, conduct, or both that would
reasonably lead the party to whom it is made to believe that the proposal is
intended to create a contract, if accepted,’ without regard to the offeror's
subjective intent.

State v. Hirschman,
supra.

The Court of of Appeals also pointed out that,

[d]uring the subsequent bench trial,
the state stipulated that defendant's `motive’ was `political shenanigans’ and
to be an `internet troll,’ `meaning a person who takes contrarian positions online
in an effort to agitate others.’ The state also stipulated that there was no
evidence that defendant actually tried to purchase an official ballot. Moreover,
the state recognized that `people do post crazy political satirical things to
the Internet, and they do so on the same page in which [defendant] posted this
advertisement.’ Defendant testified at trial that he did not believe that a
reasonable person would understand his post as making a serious offer to
purchase a ballot. He also stated that, in hindsight, he wished his post had
specified that it was satirical, but hedged: `obviously it's not a good
joke if you put that at the end, because then you don't get the response.’

After the state rested, defendant moved
for judgment of acquittal, contending, in part, that he `did not offer to
purchase an official ballot for money.’ (Emphasis in original.) In
essence, defendant contended that he had not offered to `purchase’ a ballot,
but had offered money only for the privilege of completing the ballot.
Additionally, defendant argued that he had not knowingly or intentionally made
an `offer,’ because no reasonable person would believe that his post manifested
an actual intent to purchase a ballot and because a person does not `offer’ to
purchase a ballot, as that term is used in Oregon Revised Statutes
§260.715(9), unless the person intends to complete the transaction. The court
denied defendant's motion. Defendant raised similar points, again
unsuccessfully, during his closing argument. The court again rejected those
arguments, found defendant guilty, and sentenced him to 12 months of bench probation.

State v. Hirschman,
supra (emphasis in the original).

The Court of Appeals then summarized the issues raised by
Hirschman’s appeal:

Defendant appeals, renewing his
challenges to the trial court's interpretation of `purchase’ and `offer’ and,
alternatively, his challenges to the constitutionality of Oregon Revised
Statutes §260.715(9). Specifically, defendant asserts that the trial court
erred in three respects: (1) in disallowing defendant's demurrer, which
challenged the facial constitutionality of Oregon Revised Statutes §260.715(9);
(2) in permitting `the state to elect a theory of Oregon Revised Statutes
§260.715(9) that interpreted “offer” to have the same definition as the Uniform
Civil Jury Instructions’; and (3) in denying defendant's motion for judgment of
acquittal, particularly referencing the court's interpretation of `purchase’
and `offer.’ We begin our analysis by considering the statutory-interpretation
issues raised in defendant's challenge to the denial of his motion for judgment
of acquittal. See State v. Rodriguez-Moreno, 273 Or. App. 627, 633 n.6, 359 P.3d 532
(2015), rev. den, 358 Or. 611, 369 P.3d 386 (2016) (courts generally
address statutory arguments before constitutional arguments, and address state
constitutional arguments before those based on the federal constitution). We
then address defendant's contention that the trial court should have granted his
demurrer.

State v. Hirschman,
supra.

The court began its analysis of the issues in the case by
explaining that

The Court of Appeals then took up Hirschman’s motion for a
judgment of acquittal:

Again, defendant was charged with
knowingly violating Oregon Revised Statutes §260.715(9), which provides
in, pertinent part: `A person may not * * * offer to purchase, for money or
other valuable consideration, any official ballot * * *.’ Defendant first
argues that he was entitled to a judgment of acquittal because his Craigslist
posting did not offer to `purchase’ a ballot. In defendant's view, to
`purchase’ a ballot means `to acquire or take ownership of’ that tangible
object. He contends that his posting suggested only that defendant wanted
to use another person's ballot, for a short period of time, by
completing it and giving it back to that person, who would then sign the
completed ballot. Such an action does not, according to defendant, amount to a
`purchase.’

The state acknowledges that the term
`purchase’ can, as defendant asserts, mean the acquisition of a tangible
object. The state argues, however, that the term also encompasses the act of
buying the intangible right to use an object.

We need not resolve the parties'
disagreement about the extent to which the word `purchase,’ as used in Oregon
Revised Statutes §260.715(9) may (or may not) extend to acquiring intangible
rights to use a ballot or one of the other items listed. As the parties agree,
the plain meaning of `purchase’ includes the act of paying money to acquire an
object. See State v. Briney, 345
Or. 505, 511, 200 P.3d 550 (Oregon Supreme Court 2008) (courts give an undefined term of
common usage a `plain, ordinary meaning’). Here, the evidence is
sufficient to support a finding that defendant offered to make just that kind
of purchase. Again, his Craigslist posting stated, in part:

`Meet us in the
parking lot downtown near the drop off voting booth this weekend. All you need
to do is bring your UNFILLED clean voting ballot and let us fill
it out then you sign, and we hand it to the volunteer in the
voting booth. Its [sic] that simple! Then you get $20.’

(Emphases added.) That posting proposed
that an elector give defendant and some unknown other person (`us’) a ballot to
fill out, that the elector then sign the ballot, and that defendant and his
accomplice (`we’) then hand in the ballot. Thus, the posting suggested that
defendant wished to pay $20 to divest an elector of a ballot and acquire it
himself, albeit for a short period of time, before he and an accomplice would
hand it over to an elections volunteer. That acquisition of a tangible ballot
in exchange for money would constitute a `purchase’ within the plain meaning of
that term, even though defendant stated that he planned to keep the ballot only
temporarily. The trial court did not err by denying defendant's motion for
judgment of acquittal to the extent it was based on defendant's contention that
what he proposed was not a `purchase.’

State v. Hirschman,
supra.

The opinion went on to explain that

Defendant also contends that the state
failed to prove that he made an `offer’ at all. In his view, the phrase `offer
to purchase,’ as that phrase is used in Oregon Revised Statutes
§260.715(9), carries a requirement that the state prove that the offeror intend
to follow through with the purchase. The state contends that `offer’ carries
its plain meaning and it therefore suggests that Oregon Revised Statutes
§260.715(9) `prohibit[s] any statement that a reasonable person would
understand to be a proposal to buy or sell a ballot.’ The state argues in its
brief that giving the word `offer’ that meaning—which does not require proof
that the offeror intended to carry through with the purchase—reflects
legislative intent `to prevent not only realized misconduct,
but also the enabling of misconduct (such as the creation of a
marketplace for ballots) as well as the public perception that election results
are untrustworthy because ballots are for sale.’ (Emphases in original.)

State v. Hirschman,
supra (emphasis in the original).

The court then explained that it was going to begin its
analysis of the issues in the case

with the words of the statute
itself. See Bundy v. NuStar GP, LLC, 277 Or. App. 785, 793, __P.3d __ (2016) (in construing a
statute, `we give primary weight to the text and context of the provision”).
The term `offer’ is not statutorily defined for purposes of Oregon Revised
Statutes §260.715(9) so we consider its dictionary definition. Webster's
defines `offer’ as `to present for acceptance or rejection * * * an action
or movement indicating a purpose or intention of doing something.’ Webster's
Third New Int'l Dictionary 1566 (unabridged ed. 1993). That definition
looks only to what the offeror's actions would objectively indicate to
another person, not to what the offeror may subjectively intend.
Similarly, Black's Law Dictionary 1189 (10th ed. 2014) defines
`offer’ as

`1. The act or an instance of
presenting something for acceptance; specif., a statement that one is willing
to do something for another person or to give that person something * * * 2. A
promise to do or refrain from doing some specified thing in the future,
conditioned on an act, forbearance, or return promise being given in exchange
for the promise or its performance; a display of willingness to enter into a
contract on specified terms, made in a way that would lead a reasonable person
to understand that an acceptance, having been sought, will result in a binding
contract.’

Like Webster's, Black's definition
of `offer’ focuses on the offeror's actions and what they “would lead a
reasonable person to understand,” and does not reflect anything about the
offeror's subjective intent. Thus, the dictionary definitions of the word are
consistent with the trial court's determination that `offer,’ as used in Oregon
Revised Statutes §260.715(9), relates to the message that the offeror has
conveyed, and that it does not require the state to prove that a person charged
with offering to purchase a ballot actually intended to follow through with the
purchase. We conclude that the word `offer’ means, in this context, a
communication that would objectively be understood as proposing to engage in a
described transaction. . . .

In sum, the trial court did not err
when it rejected defendant's contention that the phrase `offer to purchase,' as
used in Oregon Revised Statutes §260.715(9), encompasses a requirement
that the person charged with violating the statute have subjectively intended
to follow through on that offer if it were accepted. The trial court correctly
denied defendant's motion for judgment of acquittal to the extent it was
premised on that interpretation of the statute.

State v. Hirschman,
supra.

Next, the Court of Appeals explained that

[t]o recap: in rejecting defendant's
challenge to the denial of his motion, we have concluded that a person `offer[s]
to purchase * * * any official ballot,’ for purposes of Oregon Revised
Statutes §260.715(9), if the person communicates a message that objectively
would be understood as proposing to purchase the right to use another person's
ballot. With that understanding in mind, we turn to defendant's argument that
the trial court should have granted his demurrer because the statute abridges
expression in violation of Article I, section 8.

State v. Hirschman,
supra.

The court pointed out that that Article I, section 8, of the
Oregon Constitution, provides: `No law shall be passed restraining the free
expression of opinion, or restricting the right to speak, write, or print
freely on any subject whatever; but every person shall be responsible for the
abuse of this right.’It also explained
that “[u]nder the analytical framework described in State v. Robertson, 293 Or. 402, 649 P.2d 569 (Oregon Supreme Court
1982), we determine into which of three categories the challenged statute
falls.” State v. Hirschman, supra.

The Court of Appeals went on to describe the three Robertson categories:

`Under the first category, the court
begins by determining whether a law is ‘written in terms directed to the
substance of any opinion or any subject of communication.’ . . . State v. Robertson, supra. If it is,
then the law is unconstitutional, unless the scope of the restraint is ‘wholly
confined within some historical exception that was well established when the
first American guarantees of freedom of expression were adopted and that the
guarantees then or in 1859 demonstrably were not intended to reach.’. . . If
the law survives that inquiry, then the court determines whether the law
focuses on forbidden effects and ‘the proscribed means [of causing those
effects] include speech or writing,’ or whether it is ‘directed only against
causing the forbidden effects.’ . . . If the law focuses on forbidden
effects, and the proscribed means of causing those effects include expression,
then the law is analyzed under the second Robertson category. Under that category, the court determines
whether the law is overbroad, and, if so, whether it is capable of being
narrowed. State v. Robertson, supra.
If, on the other hand, the law focuses only on forbidden effects, then the
law is in the third Robertson category,
and an individual can challenge the law as applied to that individual's
circumstances. State v. Robertson,
supra.

State v. Hirschman,
supra.

The court went on to explain that

[f]or two reasons, we readily conclude
that the statutory provision is, by its terms, directed toward the content of
expression. First, as noted, we have construed the term `offer to purchase’ to
mean a communication that objectively conveys a proposal to purchase another
person's ballot. Thus, by prohibiting the making of such an offer, the
legislature has criminalized the act of communicating a certain message.
Because a person can violate the pertinent part of Oregon Revised Statutes
§ 260.715(9), only through
expression—by communicating the prohibited message—that part of the statute
appears, by its terms, to fall within the first Robertson category. See State v. Moyer, 348 Or. 220, 232, 230 P.3d 7 (2010)
(statute prohibiting making a campaign contribution in a false name fell within
the first Robertson category
because `the falsity that the statute prohibits can only be achieved through
expression—through one person's communication of a falsehood to another person’).

Second, Oregon Revised Statutes §
260.715(9), is not specifically directed against any harmful effects of
the prohibited communication in a way that would bring the statute within the
second Robertson category. Even
assuming that the state has accurately characterized the harms that the
legislature may have hoped to prevent, a person's communications can
violate Oregon Revised Statutes § 260.715(9), whether or not the
targeted harms occur. Thus, defendant's Craigslist posting violated the
statutory prohibition against offering to purchase a ballot without regard to
whether, in fact, that posting created public doubt in the validity of
elections or the appearance of fraud. . . .

State v. Hirschman,
supra (emphasis in the original).

Therefore, the court explained because the State, i.e., the
prosecution, had not

suggested any other well-established
historical exception to Article I, section 8, protections that might apply to the
restriction on expression that Oregon Revised Statutes § 260.715(9), imposes,
and we are not aware of one.Nonetheless, the state argues more broadly
that `a historical exception exists authorizing the government to closely
regulate the electoral system in order to ensure the accuracy and validity of
its results, as well as public trust in the accuracy and validity of those
results.’ The state's argument reduces to a contention that any election
law designed to promote public trust in the state's election system must be
constitutional, even though it restricts speech.

That argument . . . cannot withstand Vannatta v. Keisling, 324 Or. 514, 931
P.3E 770 (1997), in which the Supreme Court rejected an analogous argument
offered in support of statutes restricting campaign contributions. In that
case, an amicus had argued `that the harm targeted by the
contribution limitations is the existence of undue influence in the political
process, or at least the appearance thereof.’ Id. at 539, 931 P.2d 770 In
dismissing the argument as having `select[ed] a phenomenon and label[ed] it as
a ‘harm,’ the court observed that,

`if the purpose of the limitation
simply is to improve the ‘tone’ of campaigns, as [the amicus] seems at bottom
to be arguing, the constitutional answer must be even clearer: The right to
speak, write, or print freely on any subject whatever cannot be limited
whenever it may be said that elimination of a particular form of expression
might make the electorate feel more optimistic about the integrity of the
political process. A contrary result would make illusory the protections
afforded by Article I, section 8.’

Id.
The same is true here. No matter how much one might wish to reduce cynicism
about elections (and any justifications for that cynicism), the legislature
cannot accomplish that goal by suppressing expression because of the `supposed
harm that the message itself might be presumed to cause to the hearer or to
society.’ State v. Ciancelli, 339 Or. 282, 318, 121 P.3d 613 (2005). But
that is exactly what the pertinent part of Oregon Revised Statutes §
260.715(9) does.

In sum, the statutory prohibition on
making an `offer to purchase’ a ballot, contained in Oregon Revised
Statutes § 260.715(9), violates Article I, section 8, of the Oregon Constitution. The trial court erred when it denied defendant's demurrer
to the information, which charged him with violating that statute.

State v. Hirschman,
supra.

The court therefore reversed Hirschman’s conviction and
remanded the case to the trial court for further proceedings.State
v. Hirschman, supra.